Outlook for the Canadian Edge Computing Market
The infrastructure hardware market in Canada is forecast to grow in the low single digits over the next few years. Given this insipid growth forecast, vendors are on the lookout for growth opportunities they can target. One such opportunity over the next few years is in the rapidly growing edge computing segment. Based on the recently published Worldwide Edge Spending Guide from International Data Corporation (IDC), the Canadian edge computing market will reach C$7.5 billion in 2024 with a compound annual growth rate (CAGR) of 12.3% over the 2019–2024 forecast period. IDC defines Edge IT as the deployment of IT resources at peripheral or edge locations, relative to where an organization's central or core IT is located. This includes heavy edge, such as remote office/branch office (ROBO), and light edge, such as mobile access.
Which features of edge computing will affect Canadian organization’s edge strategy in the next 12 months?
What’s Driving Growth in Edge Computing?
There are a number of factors driving the growth in edge computing but the single biggest factor is the massive amounts of data being created today. As the growth in IoT and mobile applications continues, it creates massive amounts of data outside of traditional datacenters, and the value in consuming, processing, and deriving insight from this data in realtime drives demand. Using cloud computing has certain processing limitations due to its centralized model creating performance, reliability, data protection, latency, and cost issues. This is pushing companies to deploy edge computing as a means to process and monetize this data where it’s being generated; at the edge.
Even the current economic slowdown and ongoing Covid-19 shock hasn’t dampened the projected spend on edge IT. In a recent IDC survey (What to Expect from Edge Spending in 2021: End-User Sentiment), more than 2 out 3 respondents said that their planned 2021 budgets on edge IT spend will either remain the same or will increase due to Covid-19. The current uncertain business environment has challenged organizations to rethink business models and adapt quickly to changing business demand. And cloud-native approaches to edge computing can increase business agility giving organizations the ability to rapidly modify operations and launch new products and services.
What’s the Edge Opportunity for End-Users and Tech Suppliers?
This growth in edge computing is also helping drive growth in the hyper-converged systems (HCI) segment within the infrastructure hardware market. The HCI segment is another of the few hot spots in the infrastructure market with a 5-year CAGR of over 7% based on the IDC converged systems tracker forecast. Right now, early adopters of edge computing typically rely on custom deployments as the market currently lacks standard approaches, and that’s where HCI comes in. IDC believes the market would benefit from technology suppliers taking a leadership role in creating and implementing standards for "HCI at the edge." Using HCI at the edge can provide organizations with an opportunity to implement an infrastructure layer that is similar to familiar infrastructure deployments in centralized datacenters and can thus be managed in a similar manner.
In some ways, the edge opportunity today is comparable to what cloud was a decade ago. For many organizations edge is already a key focus but going forward edge has the potential to be a pathway for digital transformation. Vendors and end-users also need to be cognizant of the implications of edge in terms of infrastructure investments over the next decade as organizations will need to modernize legacy infrastructure to use it for digital transformation purposes in new locations. The challenges that will come with a geographically distributed edge infrastructure are going to be unique compared to the problems faced during the cloud infrastructure development years. Suppliers and end-users will need to keep up with their edge infrastructure strategies otherwise they risk being left behind as this massive opportunity continues to evolve and grow.
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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. To learn more about IDC Canada, please visit www.idc.com/ca or follow on Twitter at @idccanada and LinkedIn.